Airtel Africa PLC · LSE:AAF
Airtel Africa — H1 2022 Earnings Presentation
40 slides from Airtel Africa's earnings presentation, Oct 28, 2021
Slide 1: Results for half year ended 30 September 2021
Airtel Africa plc Results for half year ended 30 September 2021 28 October 2021
Slide 2: Disclaimer
Disclaimer Important Information By reading this presentation you agree to be bound by the following conditions. The information contained in this presentation in relation to Airtel Africa plc ("Airtel Africa") and its subsidiaries has been prepared solely for use at this presentation. The presentat
Slide 3: Observations and priorities
Observations and priorities Observations • Strategy is successful, delivering strong set of results • Tremendous market opportunity remains • Continued strong focus on network expansion and distribution initiatives • Accelerate our digitisation programmes • Financial and operational focus will conti
Slide 4: Highlights of H1'22
Highlights of H1’22 Our Purpose Financial highlights • Our purpose is transforming lives. • Group revenue growth of 27.6%. • We drive affordability and availability of mobile and digital services in • Underlying EBITDA growth of 38.5%. markets where consumers strive for increased connectivity and fi
Slide 5: Operational Performance
Operational Performance
Slide 6: Financial highlights
Financial highlights Revenue1 Underlying EBITDA EPS Operating free margin1 (before exceptional) cash flow $2,272m 48.3% 7.5 cents $853m H1’22 +27.6% +381 bps +4.5 cents +43.1% $1,160m 48.6% 4.3 cents $425m Q2’22 +22.7% +340 bps +2.3 cents +47.8% Track record of consistent delivery of double-digit gr
Slide 7: Delivering against our objectives
Delivering against our objectives Mobile revenue growth of 25.5% Mobile revenue voice and data growing across all regions Mobile money Mobile money revenue growth of 42.0% revenue Underlying EBITDA margin increased by 381 bps Underlying EBITDA to 48.3% On track capex spend. Capex Outlook stable at $
Slide 8: Strategic Update
Strategic Update 8
Slide 9: Our evolving growth strategy
Our evolving growth strategy Win with Win with data mobile money Win with Win with distribution cost Win with Africa Win with network people 9
Slide 10: Strong results across our regions
Strong results across our regions Contribution to Customer base Revenue EBITDA Group revenue 40.4m $896m $492m Nigeria Strong data and voice 39.4% growth. Customer base (8.2%) +32.4% +35.2% now stabilising 56.8m $822m $397m Strong revenue growth Africa East 36.2% across voice, data and mobile +25.8%
Slide 11: Strong growth across voice, data and mobile money services
Strong growth across voice, data and mobile money services Contribution to Customer base ARPU Revenue Group revenue growth growth growth Strong double digit revenue Voice growth as distribution 50.2% +5.4% 11.1% +19.7% expansion drives customer, usage and ARPU growth Growing data penetration Data an
Slide 12: Voice: Strong growth with revenue up 19.7%
Voice: Strong growth with revenue up 19.7% Customer base (m) Voice usage per customer/month (mins) Voice ARPU per month ($) H1'22 122.7 H1'22 253 H1'22 1.57 5.4% 11.5% 8.9% 11.1% H1'21 116.4 H1'21 227 H1'21 1.45 Constant currency - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 - 20.0 40.0 60.0 80.0 1
Slide 13: Data: revenue up 36.9% driven by usage and customer growth
Data: revenue up 36.9% driven by usage and customer growth Customer base (m) Data usage per customer/month (GB) Data ARPU per month ($) H1'22 43.9 H1'22 3.3 H1'22 2.88 10.9% 30.5% 16.4% 19.2% H1'21 39.6 H1'21 2.5 H1'21 2.48 - 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Constant currency - 5.0 10.0 15.0 20.0 25.0 30
Slide 14: Mobile Money: a diversified business, rapidly evolving through growing ecosystem
Mobile Money: a diversified business, rapidly evolving through growing ecosystem Group Highly penetrated markets Moderately penetrated markets Low penetrated markets *excluding Nigeria 65.4% 61.1% 58.8% 60.4% 56.3% 27.8%* 29.1%* 50.7% 49.4% 44.2% 36.0% 36.6% 37.8% 38.1% 20.9% 18.8% 17.4% 16.6% 16.4%
Slide 15: Mobile Money: a diversified business, rapidly evolving through growing ecosystem
Mobile Money: a diversified business, rapidly evolving through growing ecosystem User activities and revenue contribution o 73.6% of customers use cash-in or cash-out services, contributing to 55.7% of mobile money revenue. o 68.4% of customers use for mobile recharges to top up their GSM, contribut
Slide 16: Mobile money: our fastest growing business
Mobile money: our fastest growing business Mobile money customer base (m) Total transaction value ($bn) Mobile money ARPU per month ($) H1'22 23.9 H1'22 30.5 H1'22 1.87 19.0% 47.4% 47.0% 17.3% 16.8% H1'21 20.1 H1'21 20.7 H1'21 1.60 - 5.0 10.0 15.0 20.0 25.0 30.0 - 5.0 Reported currency 10.0 15.0 20.
Slide 17: Continued progress on strategic initiatives
Continued progress on strategic initiatives Executed opportunities Future opportunities Tower deals Tower deals • Tanzania • Deal announced with SBA / Paradigm for sale of towers • Continuing to pursue potential tower deals in Gabon and Chad. in Tanzania. • Total of c.1400 towers. • Proceeds of c$17
Slide 18: Our sustainability strategy
Our sustainability strategy OUR BUSINESS OUR PEOPLE OUR COMMUNITY OUR ENVIRONMENT Our ambition is to increase digital Our ambition is to provide rewarding Our ambition is to drive digital and Our ambition is to address and minimise inclusion in Africa through the employment opportunities and to fina
Slide 19: Financial Performance
Financial Performance
Slide 20: A strong set of financial results
A strong set of financial results Revenue Underlying EBITDA Underlying EBITDA margin $2,272m $1,098m 48.3% +27.6% YoY +38.5% YoY +381 bps YoY Leverage 1 Op FCF 2 EPS (before exceptional items) 1.5x $853m 7.5 cents (vs 2.2x H1’21) +43.1% YoY (vs 3.0 cents H1’21) Board declared an interim dividend of
Slide 21: Double digit revenue growth across voice, data and mobile money
Double digit revenue growth across voice, data and mobile money $m +25.2% reported currency growth ($457m) +17.3% +33.7% +42.7% +19.7% +36.9% +42.0% +27.6% constant currency growth ($488m) On a 12 months basis, • 1% of currency devaluation across all currencies in our OpCos will have a negative impa
Slide 22: Nigeria: Strong performance and new customer acquisition restarted
Nigeria: Strong performance and new customer acquisition restarted ▪ Revenue grew 32.4% driven by both voice and Revenue Underlying EBITDA Underlying EBITDA margin data (reported currency revenue growth of 24.7%). $896m $492m 54.9% ▪ Voice revenue grew 21.0% driven by voice +32.4% YoY +35.2% YoY 114
Slide 23: East Africa: 25.8% revenue growth, with broad-based strong performance
East Africa: 25.8% revenue growth, with broad-based strong performance ▪ Revenue grew 25.8% driven by customer growth of 10.9% and ARPU growth of 11.9% (reported Revenue Underlying EBITDA Underlying EBITDA margin currency revenue growth of 24.7%). ▪ Voice revenue grew 21.8% driven by growth of $822m
Slide 24: Francophone Africa: fastest growing region in reported currency
Francophone Africa: fastest growing region in reported currency Revenue Underlying EBITDA Underlying EBITDA margin ▪ Revenue grew 22.1% supported by customer base growth and ARPU growth (reported $560m $227m 40.5% currency underlying revenue growth of 25.7%). +22.1% YoY +50.6% YoY 767 bps YoY ▪ Doub
Slide 25: Underlying EBITDA growth of 38.5%, with margin expansion to 48.3%
Underlying EBITDA growth of 38.5%, with margin expansion to 48.3% $m +35.2% reported currency growth ($286m) +38.5% constant currency growth ($303m) On a 12 months basis, • 1% of currency devaluation across all currencies in our OpCos will have a negative impact of $39m on revenues, $24m on underlyi
Slide 26: Transparent and balanced capital allocation policy
Transparent and balanced capital allocation policy 2 Group capex (excluding Efficient Sustainable spectrum) for H1’22 in line capital capital Net debt / underlying EBITDA with plans and investments structure at 1.5x guidance for full year at $650m 1 Return cash to shareholders 3 The Board has approv
Slide 27: Normalised FCF up 193%
Normalised FCF up 193% $m Notes: 1. The Group defines normalised free cash flow as net cash generated from operating activities after lease repayments, cash capex (including purchase/renewal of license & spectrum), cash interest, payment to minority shareholders in subsidiary companies. It excludes
Slide 28: Strengthening the balance sheet
Strengthening the balance sheet De-leveraging Net Debt 3.5x 3.0x As of Sep 30, As of Sep 30, Leverage 3.0x 2021 2020 xLTM Underlying xLTM Underlying USDm USDm 2.5x 2.1x EBITDA EBITDA 2.0x Foreign Currency: 2,135 1.1x 2,952 1.8x 2.0x - Holdco 1,540 0.8x 2,383 1.5x 1.5x - OPCOs 595 0.3x 569 0.4x 1.5x
Slide 29: EPS before exceptional items grew 149.7%
EPS before exceptional items grew 149.7% +149.7% growth $ cents 1 Notes: 1. Others include change in minority shareholder PAT and profit/(loss) on joint ventures. 29
Slide 30: Summary and Outlook
Summary and Outlook Summary and outlook • Our business fundamentals remain strong, and indeed continue to improve. • While we have delivered a strong set of results, Sub-Saharan Africa continues to experience a third wave of the pandemic and we continue to monitor the situation for potential impacts
Slide 31: Thank You Q&A
Slide 32: Appendix
Appendix
Slide 33: Growth by service segment waterfalls
Growth by service segment waterfalls Voice Revenue ($m) Data revenue ($m) es es +36.9% constant currency growth +19.7% constant currency growth Mobile money revenue ($m) es +42.0% constant currency growth 33
Slide 34: Mobile services
Mobile services Reported currency Constant currency Customer base (m) ARPU ($) 5.4% 19.2% 11.1% 125 .0 120 .0 122.7 16.4% 115 .0 8.9% 116.4 2.88 110 .0 es 105 .0 2.37 2.48 H1'20 H1'21 103.9 1.58 1.57 100 .0 1.45 H1'22 95.0 90.0 H1'20 H1'21 H1'22 Voice ARPU Data ARPU Revenue ($m) Underlying EBITDA ($
Slide 35: Mobile money
Mobile money Customer base (m) Transaction Value ($Bn) 19.0% 47.0% 23.9 30.5 20.1 es 20.7 15.5 15.0 H1'20 H1'21 H1'22 H1'20 H1'21 H1'22 Revenue ($m) Underlying EBITDA ($m) and Margin (%) 42.0% Underlying EBITDA Margin 180 55. 0% 160 48.2% 48.6% 48.7% 259 140 50. 0% 45. 0% 120 126 es 181 100 40. 0% 1
Slide 36: Track record of consistent delivery
Track record of consistent delivery 15 quarters of double-digit revenue growth and underlying EBITDA margin expansion Underlying Revenue (Constant currency 14.4% 11.7% 12.0% 10.0% 10.2% 12.6% 14.2% 17.9% 13.0% 19.6% 22.8% 21.7% 33.1% 22.7% growth YoY; %) Underlying EBITDA 42.6% 43.2% 43.3% 44.0% 43.
Slide 37: Africa: demographic and market potential
Africa: demographic and market potential Growing population, high youth share Low mobile penetration Population CAGR 2020-2025E, % Mobile subs penetration – Dec 2020 19% 16% 24% 23% 31% 33% 152% 152% 128% 2.7% 2.4% 107% 87% 78% 88% 84% 0.8% 78% 0.8% 69% 0.6% 51% 46% 0.0% NA Europe LatAm 1 Asia Afric
Slide 38: Effective tax rate
Effective tax rate Unit of Half year ended Half year ended Description measure H1'22 H1'21 Profit before Income tax Tax Rate Profit before Income tax Tax Rate taxation expense % taxation expense % Reported Effective tax rate $m 567 232 41.0% 281 136 48.5% Adjusted for : Exceptional Items $m (4) - 7
Slide 39: Finance cost & forex
Finance cost & forex Description H1'22 H1'21 Change Total finance charges (excluding exceptional items) $m $m $m lower by $22m mainly due to: Interest cost on gross debt and other financial liabilities 154 149 5 ▪ Net interest cost were largely same as previous Interest Income (9) (4) (4) period due
Slide 40: Normalised free cash flow reconciliation with GAAP measure
Normalised free cash flow reconciliation with GAAP measure Particulars H1'22 H1'21 Change $m $m $m Underlying EBITDA 1,098 812 286 Other non cash items 7 (7) 14 Operating cash flow before changes in working capital 1,105 805 300 Change in working capital 7 61 (54) Net cash generated from operations